CRISPR Therapeutics (CRSP -1.98%) could revolutionize the healthcare sector, and that has made CRISPR stock a hot buy. While the company doesn't have any products (yet) and is far from being profitable, it's utilizing the CRISPR gene editing platform in the development of new products that could help better treat diseases.This is shaping up to be a big year for CRISPR Therapeutics, with approval decisions for its first treatments coming up. If you're thinking about investing in CRISPR stock, here's how to do it and what you should know first.
How to buy
How to buy CRISPR stockIt's easy to invest in CRISPR Therapeutics since it's a publicly traded company. Follow the steps below to buy CRISPR stock.
1. Open a brokerage account
If you already have a brokerage account you like, you can skip this step. Otherwise, check out our guide to the top stockbrokers to compare options. Some of the most important features to look for are commission-free trading for stocks and exchange-traded funds (ETFs), useful research and analysis tools, and a quality trading platform you're comfortable using.After you've found a stockbroker, open an account. You'll need to provide some information on yourself, including personal details and employment information, and answer a few questions about your finances. In most cases, the entire process doesn't take more than 15 to 20 minutes.
2. Figure out your budget
Next up is figuring out how much you want to invest and an investing schedule. Most investors go with either dollar-cost averaging, meaning investing a fixed amount on a schedule, or investing a lump sum they've saved. So, for example, you might decide to invest $250 every two weeks if you want to dollar-cost average. Or, if you have $5,000 saved, you could invest it all at once.
If this is your first time investing, don't put all your money in CRISPR stock. Even when you like a company, having all your money invested in it is extremely risky. Spread your funds across many companies to diversify your investment portfolio.
3. Do your research
Before you invest in stocks, you should always do your due diligence. Spend some time learning about the company to see if it's a sound long-term investment. Don't just take someone else's word for it or buy because there's a lot of hype around it.
Every investor has their own way of doing this. For most investors, especially those who plan to buy and hold for a long time, fundamental analysis works well. This refers to using the information available to determine if a stock is attractively priced. If you haven't done this before, learning how to research stocks is a good first step.
4. Place an orderDeposit money to your brokerage account, if you haven't already. It can take a few business days for ACH transfers to process, so it's best to do this in advance. In your broker's trade tool, look up CRISPR Therapeutics. You can do so by searching for its ticker symbol: CRSP.
Select the option to buy, enter the amount you want to purchase, and choose an order type. The most common options are market orders and limit orders. A market order is an order to buy the stock immediately at any available price. For buy orders, you'll typically get a price near the current ask price. A limit order is an order to buy the stock only at a specified price.
Should I invest?
Should I invest in CRISPR stock?With CRISPR Therapeutics, it's all about potential. While the company doesn't have any approved products so far, that may change in the near future, and the products in the pipeline could be game-changers.
Along with partner Vertex Pharmaceuticals (VRTX -0.75%), CRISPR Therapeutics has submitted its first potential treatment, exa-cel, to U.S., European, and U.K. regulators. Exa-cel is a gene-editing treatment for two blood disorders: sickle cell disease and beta-thalassemia. The U.S. Food and Drug Administration has set the following approval decision dates for exa-cel:
- Dec. 8, 2023, for use in treating sickle cell disease.
- March 30, 2024, for use in treating transfusion-dependent beta thalassemia.
Investors are optimistic about approval odds, as the treatment has done well in clinical studies. It's not guaranteed, but if exa-cel is approved, it will be huge for CRISPR Therapeutics. It would take 40% of profits, and the treatment could possibly generate $1.7 billion in sales by 2028, according to Evaluate Pharma.CRISPR Therapeutics has other products it's developing, as well. Success with exa-cel could lead to a domino effect to speed up progress with other treatments.
It's important not to be overly optimistic, though. The best-case scenario is that exa-cel is approved for treating both blood disorders. Even if it is, it will still take time before CRISPR Therapeutics has a product on the market and is turning a profit. There could also be setbacks, such as a denial from the FDA. Biotech is one of the riskiest market sectors, so this is a stock for more aggressive investors.That said, there's a lot to like about CRISPR stock as an investment, and it could be a big winner for your portfolio. Just remember that patience is the name of the game. As with any quality stock, plan to hold it for at least five years.
Is CRISPR Therapeutics profitable?No, CRISPR Therapeutics isn't profitable. It incurred a net loss of $650.2 million in 2022. The company also states in its annual report that it has incurred significant operating losses since its inception and expects to do so for the foreseeable future.
This is normal for biotech companies, which are generally unprofitable for long periods of time while developing treatments. It's one of the main reasons they're a higher-risk investment.
Does CRISPR Therapeutics pay a dividend?
CRISPR Therapeutics doesn't pay a dividend. It hasn't paid one before, either, and it's unlikely to pay a dividend in the foreseeable future. Biotech stocks rarely pay dividends, as it makes more sense for them to reinvest profits in developing new treatments. Those interested in dividend investing don't have many options in this space.
ETFs with exposure to CRISPR Therapeutics
There are quite a few ETFs that invest in CRISPR Therapeutics. The advantage of investing in ETFs is that they contain a large number of stocks, so you get a much more diversified portfolio this way as opposed to picking individual stocks. You also save time since you can invest in just one or a few ETFs, which requires less research than picking 25 or more stocks.Here are a few of the larger ETFs with exposure to CRISPR Therapeutics:
- The Ark Genomic Revolution ETF (ARKG -0.22%) is an actively managed ETF that invests in companies incorporating genomics, including gene editing and gene therapy.
- The Global X Genomics & Biotechnology ETF (GNOM -0.28%) invests in companies that stand to benefit from the advancement of genomic science.
- The iShares Genomics Immunology and Healthcare ETF (IDNA 0.59%) invests in companies at the forefront of genomics and immunology innovation.
Those three are all biotech ETFs that have a fairly high percentage of fund allocation in CRISPR Therapeutics stock. There are also much broader funds containing far more stocks and a smaller CRISPR stock allocation, such as small-cap and mid-cap ETFs. If you don't want to pick stocks, an ETF or a mix of ETFs is a popular way to invest.
Will CRISPR Therapeutics stock split?
There's no indication that CRISPR Therapeutics will split its stock. It hasn't had a stock split before, nor has this option been discussed publicly for the future. Upcoming stock splits are usually announced at least a few weeks before they happen, and often much earlier, so CRISPR Therapeutics investors will know in advance if it plans to stock-split.